GOVERNMENT OF PAKISTAN REVENUE DIVISION CENTRAL BOARD OF REVENUE C.No.1(10)WHT/2004

GOVERNMENT OF PAKISTAN

REVENUE DIVISION

CENTRAL BOARD OF REVENUE

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C.No.1(10)WHT/2004

Islamabad, July 13, 2004 

Circular No. 14 of 2004

(Income Tax)

Subject:         WITHHOLDING INCOME TAX ON IMPORT OF EDILE OIL AND ALLOWING EXEMPTION TO EXPORT PROCEEDS OF VEGETABLE GHEE TO AFGHANISTAN FROM WITHHOLDING INCOME TAX

Withholding tax on import of edible oil both by commercial and industrial importers previously treated as minimum tax has been converted into final tax by amending sub-section (8) of section 148 of the Income Tax Ordinance, 2001. Further, the manufacturers of cooking oil or vegetable ghee or both has been provided a reduced rate of 1 % on local purchase of edible oil which too shall constitute final discharge of tax liability of such local purchases. For this purpose a new clause (1 3C) has been inserted in Part II of the Second Schedule to the Income Tax Ordinance, 2001.

2.       Further, clause (47C) has been introduced in Part IV of the Second Schedule providing that no tax under sub-section (1) of section 154 shall be collected from an exporter in respect of export of cooking oil or vegetable ghee to Afghanistan provided advance tax under section 148 was collected from such exporter at the time of import of edible oil.

3.       For the purposes of Para 2, every authorized dealer in foreign exchange shall, at the time of realization of foreign exchange proceeds on account of export of Cooking Oil or Vegetable Ghee or both to Afghanistan shall obtain copy of the Bill of Entry from the concerned exporter to confirm that advance tax under section 148 of the Income Tax Ordinance, 2001, on the import of edible oil consumed in the production of such Cooking Oil or Vegetable Ghee had been duly collected.

4.                  The aforesaid amended provisions would be applicable for withholding tax purposes from July 1, 2004 and onwards

(MUHAMMAD ASHFAQ AHMAD)
SECRETARY (WITHHOLDING TAXES)